The impact of trade with pure exporters

We extend the Melitz model to include pure exporters and study how they influence economic performance. We find that the presence of pure exporters lowers the productivity premium of exporters. Moreover, if there is a large portion of pure exporters, then international trade lowers average productivity, but not welfare. Moreover, we explore how trade liberalization in form of lower entry cost into foreign markets and lower variable export cost influences the

distribution of firms between pure exporters, ordinary exporters and non-exporters.